On Thursday, the Dow Jones Industrial Average rose by over 400 points and the S&P 500 hit a new 13-month high as investors bet that the Federal Reserve was close to halting its rate-hiking campaign following 10 consecutive increases. The S&P 500 climbed 1.4%, while the Nasdaq Composite gained 1.3%. Meanwhile, bond yields dropped and tech stocks continued to lead the market upswing, following the trend on Wall Street in 2023. The S&P 500’s surge marked a new intraday 13-month high for the index and has posted its best week since March 31. The gains brought the S&P 500 and Nasdaq to their highest intraday levels since April 2022.
The Federal Reserve’s Pause in Rate-Hike Campaign
The Federal Reserve paused its rate-hiking campaign this week, which influenced investors to believe that the central bank was close to done raising rates. Fed Chair Jerome Powell announced that the Federal Open Market Committee will take into account the cumulative tightening of monetary policy over the six weeks until its next meeting. Powell added that a decision on July’s policy move had not yet been made. This uncertainty caused stocks to whipsaw throughout Powell’s comments on Wednesday. However, the upswing on Thursday shows investors remain optimistic about the future.
Investors Remain Hopeful
Investors are hopeful that value and cyclical stocks will catch up to growth and tech. Dylan Kremer, co-chief investment officer at Certuity, said: “If it does, then that momentum has the ability to help grind the market higher.” The S&P 500 is riding its longest winning streak since November 2021 and is headed for its strongest weekly gain since March. From its October low, the broader market index is up 23%, and it has risen 14% year to date. The tech-heavy Nasdaq benchmark is up more than 30% in 2023.
Tech Stocks Continue to Lead
Tech stocks such as Microsoft, Oracle, and Alibaba rose on Thursday. Shares of Microsoft and Oracle were higher with gains of 3.1% and 3.9%, respectively. Alibaba stock climbed 3.1%. Tech stocks continue to lead the market upswing, in line with the trend on Wall Street in 2023.
Economic Data Releases
Additional economic data releases on Thursday morning provided investors and policymakers with better insight into the strength of the labor market and consumer spending. Weekly jobless claims numbers were slightly above estimates at 262,000 compared to a Dow Jones estimate of 245,000, while retail sales ticked up 0.3%.
The US stocks rallied on Thursday, with the Dow Jones and S&P touching fresh 13-month highs. Investors remain optimistic that the Federal Reserve’s pause in its rate-hike campaign will lead to further market gains. Tech stocks continue to lead the market upswing, while value and cyclical stocks are expected to catch up.